- Lakshmi Vilas Bank Q1 net profit goes up marginallyRaghuram Rajan effect fuels Karnataka Bank, Lakshmi Vilas Bank, Dhanalaxmi Bank sharesLakshmi Vilas Bank, Development Credit Bank, Dhanlaxmi Bank shares gain on RBI's foreign takeover norms boostLakshmi Vilas Bank Q3 net profit down 76 pct at Rs 7.42 cr on bad loans
Lakshmi Vilas Bank (LVB) reported a steep fall of 76.25% in net profit y-o-y to Rs 7.42 crore on Friday due to higher provisioning for bad loans.
Net interest income of the bank stood at Rs 125.32 crore, up 16.99% y-o-y. Asset quality deteriorated sharply and gross non-performing assets (NPAs) increased to Rs 722.20 crore, a jump of 48.29% y-o-y. Net NPAs stood at Rs 550.22 crore, up 70.62% y-o-y.
As a ratio, gross NPAs stood at 5.60% of gross advances, up 38 bps from the September quarter and net NPAs stood at 4.33% of net advances, up 56 bps from the second quarter.
Provisions increased to Rs 67.67 crore from Rs 20.33 crore a year ago. As a result, the bank’s capital-adequacy ratio fell 56 bps to 10.46% from the preceding quarter. Earlier in the month, ratings agency Brickwork Ratings downgraded the bank’s long-term and Tier-II bond programmes to BBB+ with a negative outlook.
Small private and public sector banks have been reporting huge drops in profit due to rising provisions made for non-performing assets and, hence, eroding their capital-adequacy ratios. Recently, United Bank of India reported a loss of R1,238 crore in Q3 due to provisions for bad loans. United Bank of India’s Tier-1 CAR stood at 5.59%, much lower than the minimum 7% under the Basel-III norms. Similarly, Dhanlaxmi Bank reported a loss of R119 crore in the third quarter and its gross NPAs hit an all-time high of 7.05% of the loan book.